Since When Did Lobbying and PR Become Extortion?

Within the next two months, a New York federal judge is expected to rule in an environmental case that goes to the core of how lobbyists, publicists and other advocates up and down K Street make their living.

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If you are one of them and you know nothing about Chevron’s racketeering lawsuit against a group of Ecuadorian indigenous peoples, farmers and their attorneys (Chevron Corp. vs. Donziger), it’s time to tune into this 20-year battle over who should pay to clean up one of the world’s worst oil contamination disasters.

The U.S. Chamber of Commerce and other business groups are backing Chevron. They hope a favorable ruling from U.S. Federal Judge Lewis A. Kaplan will help put trial lawyers out of business and weaken the ability of human rights advocates to hold corporations accountable for their misconduct. Billions of dollars are at stake. But the business groups should be careful what they ask for. The result could yield a double-edged sword that strikes not just at contingency-fee lawyers and environmental activists but encourages internecine corporate warfare as well.

Chevron is likely to win its lawsuit in the lower court—a retaliatory fight to try and avoid a $9.5 billion Ecuador judgment. Kaplan, who’s hearing the case, made numerous prejudicial statements against the Ecuadorians even before he read or heard one statement in their defense. Tellingly, Kaplan suggestedthe oil giant file the racketeering and extortion (RICO) charges against the Ecuadorians and their attorneys. In turn, the defendants have arguedthat Kaplan is biased and should be recused. As proof, they cite comments Kaplan has made that disparage Ecuador’s courts and government and question whether the Ecuadorian villagers harmed by Chevron’s pollution actually exist. He appears to be utterly unbothered by the fact Ecuador’s Supreme Court affirmed the judgment against Chevron after knocking about $10 billion off the company’s liability.

Meanwhile, Chevron maintains it’s a victim of a conspiracy campaign that works something like this:

The attorneys, who head up this “criminal enterprise” and are to be paid on a contingency basis, filed a fraudulent lawsuit with the sole purpose of enriching themselves. Publicists for the Ecuadorians (I’m one), lobbyists and unpaid environmental advocates, recruited by the attorneys, colluded with them and the Ecuadorians to pressure Chevron to pay a judgment or settle – a violation of the RICO statute, according to Chevron and Kaplan.

In other words, Chevron’s theory is that hard-hitting press releases and lobbying before Congress and government agencies to draw attention to the U.S.-based company’s actions in Ecuador equal economic extortion and are part of a grand conspiracy to pressure them to pay.

Put another way, hard-hitting press releases and lobbying before Congress and government agencies by (insert you and your client) against (insert your client’s competitors or opponents) about (insert issue that financially benefits your client) could equal extortion and be a violation of the RICO statute. Plaintiffs who win civil RICO cases are entitled to treble damages, which could bankrupt many companies or trade associations if they were to be so targeted.

U.S. case law establishes that if you lie about others to pressure them for a monetary advantage or payment, then you could be guilty of economic extortion. Chevron has charged that the Ecuadorian “conspirators” and their “co-conspirators,” like me, lied, manufactured evidence about the contamination, and committed fraud. I find this utterly preposterous and assumed we would be allowed to aggressively refute and defend against these charges in court. We were not.

During the six-week trial, which took place in October and November, Kaplan refused to allow any testimony into the record that would prove we did not lie about the contamination – our reason for demanding Chevron pay to clean up the contamination. He struck page after page of witness statements and witness testimony on the stand alleging that Texaco, now owned by Chevron, dumped more than 16 billion gallons of untreated toxic production water into the rainforest waterways and built hundreds of huge, unlined pits to store permanently pure crude and toxic water left over from oil exploration at well sites. This was the evidence relied on by the Ecuador court, an appellate court and the country’s Supreme Court to find Chevron liable.

A ruling in favor of Chevron will mean that corporations unhappy about attacks, possibly from competitors, will be empowered to file RICO lawsuits without having to prove whether the underlying attacks are, in fact, substantially true. Truth is no longer a defense, and that should trouble not only anti-corporate activists but corporations as well – and their lobbyists and publicists.

While Kaplan did allow a limited defense of a fraud charge involving an alleged bribe of the judge who ruled in the Ecuadorians’ favor and the alleged “ghost-writing” of the judge’s final ruling, the only solid evidence of fraud Chevron presented was the testimony of an admittedly corrupt former Ecuador judge – a man who Chevron is paying at least $350,000 during the next two years in exchange for his testimony, which we argue is tainted. Chevron also has arranged for the man and his entire family to live in the United States and apply for political asylum.

No one knows exactly how Kaplan will craft his opinion or if it will survive on appeal.

But, if Chevron gets what it wants, K Street and its corporate clients could easily find themselves on the wrong end of a RICO case. Free speech, especially in Washington, D.C., and New York City, will suddenly cost a whole lot more than the cars and drivers delivering the endless line of talking heads for the political punditry that feeds the cable news beast.

Of course, advocating for what you believe is right and just would be in jeopardy. There’s that, too.

Karen Hinton is an advocate and former paid spokesperson for the Ecuadorians suing Chevron.